The Everything Store: Jeff Bezos and the Age of Amazon (47 page)

“This is developing too slow. Do you care about this?”

“Yes, Jeff, we care.”

“Strip the design down, it’s too complicated. Also, it needs to move faster!”

Faster
was one way to describe 2012 and the first half of 2013. Over those months, Amazon’s stock rose 60 percent. The company issued a total of 237 press releases—an average of 1.6 announcements for every two weekdays. Since the company was now beginning to collect sales tax in many states, it didn’t have to sidestep nexus issues
and so opened more than a dozen new fulfillment and customer-service centers around the world. It acquired Kiva Systems, a Boston company building mobile robots meant to one day replace the human pickers in fulfillment centers, for $775 million in cash. It renewed its push into apparel with its dedicated website MyHabit.com and opened a new store for industrial and scientific equipment, Amazon Supply.

Amazon also expanded a service that allowed advertisers to reach Amazon customers on all of the company’s websites and devices. Run by business-development chief Jeff Blackburn, advertising at Amazon is a highly profitable side business that helps subsidize free shipping and low prices and funds some of the company’s expensive long-term projects, like building its own hardware.

To distinguish its growing digital ecosystem from rival platforms offered by Apple and Google, Amazon spent millions to acquire and create new movies and television shows to add to its free Prime Instant Video catalog, and through Amazon’s publishing divisions, it funded the publication of many exclusive books for the Kindle. Amazon’s chief rivals, Apple and Google, are arguably better positioned in this burgeoning digital world and have considerably greater resources. So Bezos is hedging his bets; if customers choose Apple iPads or Google tablets, they can still shop on Amazon and play their music collections and read their Kindle books on a variety of applications that have been rolled out for its rivals’ devices.

In the fall of 2012, hundreds of journalists turned out at an airplane hangar in Santa Monica to watch Bezos unveil a new line of Kindle Fire tablets, including an iPad-size jumbo version and the $119 Kindle Paperwhite, a dedicated e-reader with a glowing, front-lit screen. “This achieves our original vision,” Bezos told me in an interview after the event, referring to the latest dedicated reading device. “I’m sure we’ll figure out ways to continue forward, but this is a step-change product.”

Earlier that same week, a federal judge had approved a settlement with three of the major book publishers in the Justice Department’s antitrust case over agency pricing. (The other two publishers
targeted in the investigation would settle within the next few months.) Amazon was now free to resume discounting new and bestselling e-books. I asked Bezos about it but he didn’t care to gloat. “We are excited to be allowed to lower prices” was all he said.

In December, Amazon held its first conference for customers of Amazon Web Services at the Sands Expo Center in Las Vegas. Six thousand developers showed up and listened intently as AWS executives Andy Jassy and Werner Vogels discussed the future of cloud computing. The size and passion of the crowd was an emphatic validation of Amazon’s unlikely emergence as a pioneer in the field of enterprise computing. On the second day of the conference, Bezos himself took the stage and in a freewheeling discussion with Vogels gave a rare window into his personal projects, like the Clock of the Long Now, that mechanical timepiece designed to last for millennia that engineers are preparing to build inside a remote mountain on Bezos’s ranch in Texas. “The symbol is important for a couple of reasons. If [humans] think long term, we can accomplish things that we wouldn’t otherwise accomplish,” Bezos said. “Time horizons matter, they matter a lot. The other thing I would point out is that we humans are getting awfully sophisticated in technological ways and have a lot of potential to be very dangerous to ourselves. It seems to me that we, as a species, have to start thinking longer term. So this is a symbol. I think symbols can be very powerful.”

On the stage, Bezos then predictably unleashed a steady tide of Jeffisms, about long-term thinking, about a willingness to fail and to be misunderstood, and about that shocking revelation so many years ago, in the very first SoDo warehouse, that it might be a great idea to add—
He’s not really going to tell that story again, is he?
—packing tables!

The packing-table anecdote may be showing its age, but Bezos is trying to reinforce the same values. Like the late Steve Jobs, Bezos has gradually worn down employees, investors, and a skeptical public and turned them toward his way of thinking. Any process can be improved. Defects that are invisible to the knowledgeable may be obvious to newcomers. The simplest solutions are the best. Repeating
all these anecdotes isn’t rote monotony—it’s calculated strategy. “The rest of us try to muddle around with complicated contradictory goals and it makes it harder for people to help us,” says his friend Danny Hillis. “Jeff is very clear and simple about his goals, and the way he articulates them makes it easy for others, because it’s consistent.

“If you look at why Amazon is so different than almost any other company that started early on the Internet, it’s because Jeff approached it from the very beginning with that long-term vision,” Hillis continues. “It was a multidecade project. The notion that he can accomplish a huge amount with a larger time frame, if he is steady about it, is fundamentally his philosophy.”

* * *

By 2012, Amazon had completed its move to its new office buildings in Seattle’s South Lake Union district. Another transition occurred at around this same time, though it was evident only to employees at first. In signs around the new campus, and on the rare tchotchkes like mugs and T-shirts that were available to employees after the move, the company’s name was represented as simply Amazon, not Amazon.com. For years Bezos had been adamant about using the longer version, part of an effort to engrave the Web address on customers’ minds. Now the company produced so many things, including cloud services and hardware, that the anachronistic original moniker no longer made sense. The name on the website was abbreviated in March of 2012. Few people noticed.

Amazon, it seemed, was a company in constant flux. Yet some things remained the same. On a cold, wet Tuesday morning in early November 2012 at around nine o’clock, a Honda minivan pulled up to Day One North, on the corner of Terry Avenue and Republican Street in Seattle’s South Lake Union neighborhood. Jeff Bezos, sitting in the passenger seat, leaned over to kiss his wife, MacKenzie, good-bye, got out of the car, and walked self-assuredly into the building to start another day.

In many ways, Bezos’s life has become as complicated as Lee Scott’s was back in 2000 when Bezos visited the former Walmart CEO and marveled at the security around him. Bezos may not get ferried to work in a black sedan, but Amazon still spends $1.6 million per year on personal security for him and his family, according to the company’s financial reports.

His small domestic scene with MacKenzie speaks to at least one normal routine he has managed to preserve amid the unimaginable complexity that comes with Amazon’s towering success. The family can hire drivers; they can buy limousines and private airplanes. Yet they still own a modest Honda, albeit a larger model than the Accord of a decade ago, and MacKenzie often delivers their four children to school and then drives her husband to work.

There is nothing modest about their wealth, of course. Bezos’s fortune is now estimated at $25 billion, making him the twelfth-richest person in the United States.
³

The family is exceedingly private, yet their lives cannot be completely hidden from view. Their lakefront mansion in the wealthy residential enclave of Medina, near the home of Bill and Melinda Gates, was renovated in 2010 and sits on 5.35 acres. It has 29,000 square feet of living space across two buildings, according to public records, and that’s not including a caretaker’s cottage and a boathouse—the site where Bezos first organized the team that would build Amazon Prime.
⁴

In addition to the primary residence, the Bezos family owns homes in Aspen, Beverly Hills, and New York City, plus the sprawling 290,000-acre ranch in Texas, where Blue Origin has a facility and where its rockets will begin their trips to space. MacKenzie rents a one-bedroom apartment near their home in Medina that she uses as a private office to write. She is the author of two novels, including
Traps,
published in 2012. “I am definitely a lottery winner of a certain kind,” she told
Vogue
magazine in a rare profile in 2012, referring to her husband’s success. “It makes my life wonderful in many ways, but that’s not the lottery I feel defined by. The fact that
I got wonderful parents who believed in education and never doubted I could be a writer, the fact that I have a spouse I love, those are the things that define me.”
⁵

Bezos and MacKenzie seem to share the skill of efficiently dispersing their time across many personal responsibilities and multiple projects. For Bezos, in addition to his family and Amazon, there’s Blue Origin, where he typically spends each Wednesday, and Bezos Expeditions, his personal venture-capital firm, which holds stakes in companies such as Twitter, the taxi service Uber, the news site Business Insider, and the robot firm Rethink Robotics. Since August of 2013, Bezos has owned the Washington Post newspaper and has said he wants to apply his passion for invention and experimentation to reviving the storied newspaper. “He invests in things where information technology can disrupt existing models,” says Rodney Brooks, the MIT robotics professor behind Rethink Robotics, which aims to put inexpensive robots on manufacturing assembly lines. “He’s certainly not hands-on but he has been a good person to talk to when various conundrums come up. When we go ask him questions, it’s worth listening to his answers.”

Bezos coordinates closely with the creators of the Clock of the Long Now and oversees its quarterly review sessions, which the clock engineers call Ticks. “He’s hell on the details and in the thick of the design and very strict on where costs are going,” says Stewart Brand, the cochairman of the Long Now Foundation.

Bezos and MacKenzie are personally involved in the Bezos Family Foundation, which doles out education grants and mobilizes students to help other young people in impoverished countries and disaster zones. The foundation is run by Jackie and Mike Bezos, and Christina Bezos Poore and Mark Bezos, Jeff’s siblings, are directors. The family has imported a little Amazon-style management to their philanthropy. In the main conference room of the foundation’s office, a few blocks from Amazon’s headquarters, is a rag doll that they often prop up in an empty chair during meetings. The doll is meant to represent the student they are trying to help—just as Bezos once had a habit of keeping a chair empty in meetings to represent the customer.

The Bezos family is unusually close-knit and focused on the future. But occasionally the past does catch up with them. In June 2013, on a Wednesday evening close to midnight, Jeff Bezos finally responded to the messages sent by Ted Jorgensen, his biological father. In a short but heartfelt e-mail, sent to Jorgensen’s stepson because Jorgensen himself does not use the Internet, Bezos tried to put the old man at ease. He wrote that he empathized with the impossibly difficult choices that his teenage parents were forced to make and said that he had enjoyed a happy childhood nonetheless. He said that he harbored no ill will toward Jorgensen at all, and he asked him to cast aside any lingering regret over the circumstances of their lives. And then he wished his long-lost biological father the very best.

* * *

When you have fit yourself snugly into Jeff Bezos’s worldview and then evaluated both the successes and failures of Amazon over the past two decades, the future of the company becomes easy to predict. The answer to almost every conceivable question is yes.

Will Amazon move to free next-day and same-day delivery for Prime members? Yes, eventually, when Amazon has so many customers in each urban area that placing a fulfillment center right outside every city becomes practical. Bezos’s goal is and always has been to take all the inconvenience out of online shopping and deliver products and services to customers in the most efficient manner possible.

Will Amazon one day own its own delivery trucks? Yes, eventually, because controlling the so-called last-mile delivery to its customers can help fulfill that vision and improve the company’s ability to meet the precise delivery promises it relishes making to customers.

Will Amazon roll out its grocery service, Amazon Fresh, beyond Seattle and parts of Los Angeles and San Francisco? Yes, when it has perfected the mechanics of profitable storage and delivery of perishables, like vegetables and fruit. Bezos does not believe Amazon can
grow to the scale of Walmart without mastering the science of groceries and apparel.

Will Amazon introduce a mobile phone or an Internet-connected television set-top box? Yes (and possibly before this book is published), because the company wants to offer its services on all the connected devices that its customers use without having to rely entirely on the hardware of its chief competitors.

Will Amazon expand beyond the ten countries where it currently operates retail websites? Yes, eventually. Bezos’s long-term goal is to sell everything, everywhere. As Russia, for example, develops a stronger shipping infrastructure and a more reliable credit card processing system, Amazon will introduce its e-commerce store and digital services there, perhaps by acquiring local companies or by seeding the market with the Kindle and Kindle Fire, as it did in Brazil in 2012 and in India in 2013.

Will Amazon always buy its products from manufacturers? No; at some point it might
print
them right in its fulfillment centers. The evolving technology known as 3-D printing, in which microwave-size machines extrude plastic material to create objects based on digital models, is just the kind of disruptive revolution that fascinates Bezos and could allow him to eliminate more costs from the supply chain. In 2013, Amazon took the first step into this world, opening a site for 3-D printers and supplies.